Stablecoin news: Bank of England Sets £40B Issuance Limit for Issuers

Key Insights:

• Stablecoin news: Bank of England removed planned holding caps for individuals and businesses under its stablecoin rules.
• Each systemic stablecoin will face an initial £40 billion temporary issuance guardrail in the UK.
• Stablecoin issuers can hold up to 70% of backing assets in short-term UK government debt.

Stablecoin news took a new turn after the Bank of England released rules for systemic issuers. The central bank set a temporary £40 billion issuance limit for each systemic stablecoin. It dropped earlier plans to cap holdings for individuals and businesses. The draft rules form part of the UK’s plan for regulated digital money. The Bank expects regulated stablecoins to operate in the UK from 2027.

Stablecoin News: Bank of England Moves Toward New UK Payment Rules

The Bank of England published its policy statement and draft Code of Practice on June 22, 2026. The rules apply to major stablecoin issuers that could play a larger role in UK payments. The Bank wants to support new payment services while protecting public trust in money.

The new guardrail replaces the holding limits that the Bank considered in its earlier consultation. Under the revised plan, households and businesses will not face direct temporary limits on stablecoin balances. Instead, the Bank will apply a £40 billion limit to each systemic stablecoin. This change gives users more room while letting the Bank monitor credit risks.

The earlier proposal included temporary limits of £20,000 for individuals and £10 million for businesses. Crypto firms and lawmakers had criticized those caps during the consultation period. The Bank changed its approach after reviewing feedback from industry and other stakeholders. As a result, it moved from user limits to an issuance guardrail.

This stablecoin news marks a shift in how the UK plans to control growth in digital money. The Bank said the issuance limit should deliver the same policy goal at a lower cost. It also said the model should be easier for issuers to apply. The guardrail will remain temporary and will face regular review.

Backing Asset Rules Give Issuers More Room

The Bank also changed the rules for assets backing systemic stablecoins. Issuers may now hold up to 70% of backing assets in short-term UK government debt. The remaining 30% must stay as deposits at the Bank of England. The earlier proposal allowed only 60% in short-term gilts and required 40% in central bank deposits.

This change gives issuers more room to build working business models. Short-term government debt can generate income, while central bank deposits support fast redemptions. The Bank said this mix can help issuers handle outflows during stress. It also keeps a direct link between systemic stablecoins and central bank support.

Bank and FCA Continue Joint Rulemaking

The Bank of England will work with the Financial Conduct Authority on the wider regime. The FCA will publish further details on its final rules shortly. Together, both regulators plan to guide firms from non-systemic status into systemic supervision. This process should help firms scale under clearer oversight.

Sarah Breeden, Deputy Governor for Financial Stability, said the rules set the foundations for trust in new money. She also pointed to prompt redemption, strong protections, and central bank support. The stablecoin news places consumer confidence at the center of the regime. It also shows that payment innovation remains part of the UK policy agenda.

The Bank will collect feedback on the draft Code of Practice until September 22, 2026. It then plans to finalize the rules by the end of 2026. The timeline gives issuers, payment firms, and lawmakers several months to review the details. It also leaves room for changes before the regime becomes final.

The latest stablecoin news places the UK closer to a formal path for regulated digital money. The £40 billion guardrail will stay until the Bank addresses risks to credit provision. The Bank may later raise or remove the limit after further review.

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